A 1994 deal between the state of Pennsylvania and Verizon, a long-standing sore spot for critics of the telco, has apparently ended not with a bang, but with a whimper. Critics charge that Bell Atlantic made billions off of the deal, while offering services they knew would never see the light of day.

In 1994 Verizon (then Bell Atlantic) struck a landmark deal with the state of Pennsylvania. The deal provided Verizon with hefty financial incentives if they met certain broadband rollout criteria. It's estimated that those financial incentives over the years clock in somewhere around $2.1 billion dollars.

As part of that agreement, Bell Atlantic agreed to have 20% of the state broadband wired by 1998, and 50% by 2004. By 2015, broadband would be run throughout the state to the majority of Verizon's customers. It's important to note that this wasn't DSL they were talking about...but 45MB/s symmetrical fiber service right to the door of homes and businesses, ambitious and impractical for certain, but nonetheless included in the language of the agreement. While wiring every home with fiber skirts the limits of reality, the financial benefits received from Verizon in the deal were very real.

Out of the 2.1 billion dollars received in the deal, $1.5 billion of it consisted of extra tax deductions. Telco critic Bruce Kushnick suggests in a report filed in February that this breaks down to $785 per household, a total he and several other telco critics believes Verizon should be forced to pay out in refunds for broken promises to Pennsylvania residents.

Verizon, naturally, says they're more than ready to offer such speeds. Speaking to the Philadelphia Inquirer last February, Ronald F. Weigel, director of government relations for Verizon's Pennsylvania division, says the company could provide any school, or business within Verizon's service area with a 45 Mbps connection, provided they could pay for it. "I don't care if they're in Altoona or Philadelphia, we're prepared to offer it," he suggested.

Kushnick's report goes on to note that by March 28, 2002, the Pennsylvania PUC acknowledged Bell Atlantic's failure to adhere to the state's Alternate Regulation plan: "...this Commission has a legal obligation to reject Verizon PA’s 2000 Update and require it to submit a new update specifying its plans to satisfy its legal obligation to provide a modernized network with broadband capability of at least 45 Mbps upstream and downstream, to be available within five days from the customer request date."

That update, which needed to show Verizon was working toward that 45Mbps goal, never really came. Instead, in a ruling this week, the state essentially allowed Verizon to completely ignore the agreement, keep all financial incentives, and provide state-wide connectivity via copper lines, ignoring the language of the original agreement.

Commissioner Glen Thomas, speaking in fluent lobby-eese, defended his ruling: "As Pennsylvania considers its telecommunications policy of the future, I believe that our collective energies will be best spent on creating a climate that allows factors such as competition and demand to flourish." Application of such 'energies' apparently doesn't include holding companies accountable for billions in profits already pocketed for services that were never deployed.

Commissioner Terrance Fitzpatrick, who has long accused Verizon of backpedaling on the agreement, was the lone dissenting voice in the 4-1 vote. According to Fitzpatrick, he does not "believe this decision is equitable to customers in light of the value to Verizon of being released from its prior obligation."

The scary part..

...is even if there were a repaymenet due from Verizon it would still come out of the consumer's pocket.

If I lived in Pennsylvania, I think my collective energies would be best spent on creating a climate that allows factors such as contractual obligation and responsibility TO the taxpayer to flourish.--BE LIKE THE TWENTY-SECOND ELEPHANT WITH HEATED VALUE IN SPACE--BARK!

Re: The scary part..

Mr. Thomas served as Chairman of the Pennsylvania PUC until May 20, 2003. As such, he was the architect of the Commissions backpedaling vis a vis Verizon. His official bio on the PUC Web site notes Commissioner Thomas has been involved in developing Pennsylvanias competition initiatives since he was tapped in 1995 as former Governor Tom Ridges principal adviser on utility and environmental issues. And letting Verizon skate is fostering competition? Que?

But from the on the other hand, she wore a glove department, he has championed UNE-P - - From an article last October 30th - - FCC chairman Michael Powell's office met with disapproval and resistance on Monday, as state regulators from across the nation voiced opposition to any attempt by the FCC to preempt states' rights to legislate critical telecommunications issues within their states. Regulators from a dozen states at a National Association of Regulatory Utility Commissioners ("NARUC") meeting rebuked the recent notion by SBC and other Baby Bells that the Bells are losing money on the unbundled network element platform ("UNE-P"). "UNE-P is important, there's no doubt about it," said Glen Thomas, chairman of the Pennsylvania Public Utility Commission. He said that nearly half of Pennsylvania's CLECs use UNE-P. "We've talked to several people who truly depend on UNE-P as an initial mode of entry."

So he appears to be a dichotomy of sorts...and maybe  maybe  he thought PA couldnt win this battle against Verizon. But it's a shame the taxpayers had to take such a hit. Lets call and ask him!

I personally think we developed language because of our deep inner need to complain. - - Jane Wagner

Penna. PUC full of morons

I remember how the PUC said this would revolutionize the commonwealth. What a bunch of morons. As for Verizon, the commonwealth cannot save them anymore. Many people in my area have given up on landline altogether and more are cutting the cord each day. So there is some justice in that they are no longer feeding the machine. I think the recent Verizon layoffs are proof of that.--Jewel got Britney-fied! There is hope for the world yet!

Re: Penna. PUC full of morons

I remember it too. Promises promises. I think pnh hit the nail on the head. People in this area are fed up - and folks are leaving Verizon all together (like me). I think this trend will continue forever.

**And to think I was paying those bastards premium prices for ISDN back in 1996-1997.**

Re: Penna. PUC full of morons

said by murdok6100:I remember it too. Promises promises. I think pnh hit the nail on the head. People in this area are fed up - and folks are leaving Verizon all together (like me). I think this trend will continue forever.

This is the reason that the state enacting new fees for landlines to supposedly "pay for" this BS won't bother me. As Verizon loses landline customers to cheaper alternatives such as cellphones and cable modems, they will lose more and more clout with the government.--Jewel got Britney-fied! There is hope for the world yet!

blatant thefy

it's incredible they get away with this. for what it's worth I write many nasty letters to NY State and City Politicians. at some point people have to take some sort of stand and it starts with the politicians. each household was robbed of 785 dollars with a wink and a nod for Pennsylvania politicians. I think they should relentlessly demand that money back from the Politicians and force them to force Verizon to pay. "No Taxation Without Representation" it's time we acknowledge the officials we elect represent Corporate America, we get screwed through charges on our bills which are taxes under different names, the politicians get campaign contributions and they both laugh in our faces. Pennsylvania isn't the only place this is happening and it's not just Verizon. soon we will have the 9% tax on cable modems for the Universal Fund. who gets that money?

How many?

I wonder how many other states signed deals similar to this with Verizon. I'm sure this isn't the only deal like this they aren't meeting, or maybe are-they just didn't here due to the fact there wasn't enough customers to meet the costs of such a rollout.

Deal? What Deal?

What gets me is that they had a deal to wire the state for 'braodband' or 45 Mbps and 50% of the state would be wired by 2004. Heck, I don't believe that 50% of the state even knows what broadband is... Outside of the 'big' cities of the state, it's like night and day trying and hoping to get broadband.

Even in the suburbs of Pittsburgh, broadband coverage is spotty. My old place I had to wait until Verizon push the DSL limit to 18,000. In my new place, I'm hoping that the DSL order I placed today goes through. Verizon said I qualified for DSL. Sending me the modem next week. My next door neighbor told me he has been trying for years to get DSL but that Verizon has told me he is too far.

I like Verizon DSL, the speed thing is 1000 percent better than dialup. I just don't like how the slow it's been to expand the coverage. I shouldn't have to worry whether or not if my new house is capable of getting DSL.

Anyone remember 1200 baud modems? Remember how quickly it went to 2400 then the small step (or hiccup) to 33.6 then the big jump to 56K? Why can't broadband be working at that speed? It should have, those moves were all because of customer demand, wants and needs. The demand is there for broadband, just the telcos and ISP don't want to keep up.

Re: Deal? What Deal?

Anyone remember 1200 baud modems? Remember how quickly it went to 2400 then the small step (or hiccup) to 33.6 then the big jump to 56K? Why can't broadband be working at that speed? It should have, those moves were all because of customer demand, wants and needs. The demand is there for broadband, just the telcos and ISP don't want to keep up.

Comparing analog modems to digital connections is ludacris. It took nearly 70 years for the first 300 baud modems to roll after the lines were laid.

Doomed by incompetence from the beginning....

It appears the deal probably never guaranteed anything--by not specifying a price for 45 Mb service, they PUC left itself open to the current situation--VZ can claim 45 Mb is "available" everywhere--but only at outrageous cost and rates.

This deal is typical of the "exchanges" that ILECs have participated in--the key element of which is they get what they want (rate increase, higher burden on competitors, etc.) right away and some ill-defined "community benefit" is to follow. Any PUC that currently accepts such a deal is either ignorant or corrupt. (Anyone from the Illinois or Oklahoma Commissions care to identify which they are?)

Sadly, this is reminiscent of the '90's when the electric utilities pushed "automated meter reading" as a way to "save money"--but the funny thing was, in order to save money, the utilities always wanted a rate increase or surcharge to pay for the new equipment! Smart Commissions said that the utilities should pay out of the savings--Dumb Commissions granted the requests.

Re: Doomed by incompetence from the beginning....

sigh....

Sadly if I was a judge I'd have to side with Verizon on this. You are absolutely correct, and PA doesn't have a leg to stand on with this.

How can you be so dumb as to not include a price when they wrote that agreement though? Heck, I will offer anyone on this board unlimited 1GB/1GB fiber anywhere in the world, provided you pay me correctly. Geez....--This light dinner is over.

Competition

Commissioner Glen Thomas, speaking in fluent lobby-eese, defended his ruling: "As Pennsylvania considers its telecommunications policy of the future, I believe that our collective energies will be best spent on creating a climate that allows factors such as competition and demand to flourish."

I'm certainly not defending Verizon but I'm think I understand what that quote means. If Verizon were to lay fiber, I don't think they would be forced to share it with competitors. If Thomas is a big proponent of UNE-P, he wouldn't want deployment of fiber.

wow

in my state Verizon powers almost every thing, from local to long to toll. i think if Verizon does not keep to its exact words of the deal the state should sue Verizon....--SITE: coming soon! AIM: m2dek

A small correction

Interesting to note that Mr. Weigel, according to the article, actually said that Verizon could provide 45Mb to any school, hospital, or industrial park in its service area. He never made any mention of residences.--My punctuality is well known/ When the revolution takes place/ I'll be late/And I'll be shot as a traitor

Re: A small correction

said by royhandy9:Interesting to note that Mr. Weigel, according to the article, actually said that Verizon could provide 45Mb to any school, hospital, or industrial park in its service area.

LOL... Verizon can barely provide quality voice service (Voice lines get me 20K or so on dialup to remote sites) to industrial areas. Forget about DSL as well. I can't believe people bought that line.--Jewel got Britney-fied! There is hope for the world yet!

quote: Ronald F. Weigel, director of government relations for Verizon's Pennsylvania division, says the company could provide any school, business, or residence within Verizon's service area with a 45 Mbps connection

Re: A small correction

Aw...what the heck. Here is the actual text found on the Philadelphia Inquirer site:

"Ronald F. Weigel, director of government relations for Verizon's Pennsylvania division, said the company could provide any school, hospital or industrial park in its service area a 45 Mbps connection - as long as the customer can afford it.

Re: A small correction

That might be in Pennsylvania, however, in Florida, Verizon will be happy to provide a T-3 or fractional line to whomever has the money to pay for it. I have a SOHO computer consulting business and Verizon wanted $5400/mont6h for 6Mbs and a bit over $7000 for 9Mbs. Needless to say, that was just a bit over budget. I can't imagine What a full T-3 or DS-3 line would cost.--Always Reach Beyond Your Grasp[text was edited by author 2003-07-18 21:22:41]

Re: A small correction

said by mikepd:That might be in Pennsylvania, however, in Florida, Verizon will be happy to provide a T-3 or fractional line to whomever has the money to pay for it. I have a SOHO computer consulting business and Verizon wanted $5400/mont6h for 6Mbs and a bit over $7000 for 9Mbs. Needless to say, that was just a bit over budget. I can't imagine What a full T-3 or DS-3 line would cost.--Always Reach Beyond Your Grasp[text was edited by author 2003-07-18 21:22:41]

I am sure it is the same in PA. My original point was that the person who wrote the article for www.dslreports.com misquoted the Inquirer article.--My punctuality is well known/ When the revolution takes place/ I'll be late/And I'll be shot as a traitor

what's the big deal

Fiber lines are available to everyone, and you don't have to get it [directly] from Verizon. Any CLEC like worldcom or ATT would run a fiber line to you premises. One would still have to pay for the backbone provider.

Universities

The only place in Pa, one will more than likely find high speed internet access is at one of the Universities. I went to Clarion University. If I lived on Campus I had high speed, but leave campus, dial-up

ILEC that created it no longer exists

Verizon wasn't even in existence yet, and had no control over what another ILEC did before they took control.

Does that mean every deal and agreement should be redone after an a buy out?

No, but these future, pie in the sky type plans need to be along with some financial disincentive for non compliance. And also there would have to be something in writing putting the same burden on Verizon after the acquisition, they may have thought better of such a plan and wouldn't agree to continue under that deal.

Well my 2cents...

Well to be honest I think that was a bad deal for Verizon(bell) to take money and not provide service. Also there are conflicting statements which Im gonna try to research. For 1 Verizon doesnt necessarily have to lay fiber to get speeds up to 50mbps+ up and down. There is a new standard for Regular copper to hit speeds of 100mbs down/up. So that is something that is being pushed nationwide actually.

"Verizon contested that interpretation, and instead said it committed to providing broadband at a speed of 1.5 megabits per second, which can be handled by copper wires." That smells like political bs. Wierd how the terms to the service are misinterpreted but the MONEY 2.1B wasnt misinterpreted....sounds fishy dont it?!?!!

Either way I think the whole consortium to bring "AMERICA" up to speed is going to take time and understanding from both average joes to politicians. You have to think about it like this. Everyone in America isnt connected to the net , everyone doesnt "like" the net, some people could care less for the net. Security risk open up vastly when you provide anything past 100kbps to anyone. Hey think viruses and network outages are bad now. Consider the toll damage when you unleash 50mbs connections to your grandparents who dont know alot about computers but just wanna check/send email. If they dont safeguard there cpus then guess what they could be a host to potential damage to not just there personal systems but to anyone on the net for flank attacks by hackers.

"If I'm paying for a Ferrari and I get a skateboard... I think that's a big scam," said Bruce Kushnick, chairman of TeleTruth." was a funny comment to me because hey its true when you think about it.

But hey I feel if the state implied FIBER OPTIC verbal/written/expressed then they should get it because hey they forked over 2.1B and it wasnt an issue to recieve(continue to recieve) the money. I know Verizon East really has been through alot with Bell Ties/Issues so I feel everyone there with complaints. Im glad that verizon isnt the phone carrier down here but dont think for 1 second that really any phone carrier isnt just as ruthless as the next. The goodie goodie image they portray is far from reality.

The technology is out there to provide 100mbps connections through copper its currently being introduced/proposed/regulated through the govn. and to tell the truth is america ready for that speed? Bush wants it and heck he even passed a bill for it to happen so who knows....Bush wants AMERICA to be connected 100mbps by the year 2010 or 2015. I would love to see Verizon actually get the Fiber Optics out because from my knowledge when a new community came up in as I recall in Arizona a new network company established the houses all with Fiberoptic connections and provided digital cable/telephone services/internet connections through it. The final reports from it was astounding and it made noise round 98-99. Since then that type of development was made through a few new comunities in CA and FL and TX. Each one was very successful and customers experienced hardly any downtime or issues with service compared to todays standards. So I mean I would love to see a nationwide momentum to fiberoptics but hey im sure hackers feel the same.

I think verizon owes each of you $1k for no service commitement and woes of settlement. Till then "Bitch", and do anything to get the message across. Even though I work for the filthy company they should clean there hands. Dirt is external and internal with verizon. I feel your cries.

Re: Well my 2cents...

...Hey think viruses and network outages are bad now. Consider the toll damage when you unleash 50mbs connections to your grandparents who dont know alot about computers but just wanna check/send email....and to tell the truth is america ready for that speed?...

*roll eyes*

"Why would anyone want more than 640K?"

It's a darn good thing that all these freeways weren't built because America wasn't ready for them. Can you imagine the damage when you unleash a car that can do 70mph to your grandparents who don't know a lot about automobiles but just wanna go to a supermarket?

Re: Well my 2cents...

roll eyes*

"Why would anyone want more than 640K?"

It's a darn good thing that all these freeways weren't built because America wasn't ready for them. Can you imagine the damage when you unleash a car that can do 70mph to your grandparents who don't know a lot about automobiles but just wanna go to a supermarket?_______________________________________________________________There is a difference. State agencies license and enforce laws governing drivers and their ability to actually drive. They also ensure that there is a "firewall" of insurance (minimum coverage) in most states that is covering the driver/car in question. So if Grandma goes 70mph and kills someone, it will be investigated. There is no local, state or federal government agency that actually checks up on whether you have or know how to engage a firewall, check email and not open attachments from strangers or suspect ones even from friends, and avoid malicious code from browsers and peer to peer file sharing utilities, etc. I'm not certain I want one either, except maybe to verify the sender of email, and shut them down for spam or viruses/worms, and only bring them back up if they are complying.

On another front. I'm from PA. I remember this "bill" and the implications that were brought to the attentions of those I worked for at the time. I did not however research the terms ot the agreement, I just got word of mouth from higher ups in my organization at the time what it entailed and what it would do for us, but didn't check the claims with either the government docs or Bell Atlantic cum Verizon.

The way it was presented to us is this: I worked until 2000 For the Carnegie Science Center, part of the Carnegie Museums Of Pittsburgh, and loosely affiliated in this event with CMU and University of PGH, all the other higher learning schools of the area, and the City of PGH government and school systems. The promise was such: In return for the Tax breaks, and opening some right of ways cheaply for the fiber backbones, they would hook up all Schools, Government buildings and larger Non Profits/Libraries to the back bone for mega projects for free (for some unspecified time). And this evolved into a deal where they would partner (by 1998 or 99) with the groups to do things like making Diskless CPU"s in public places able to access data from Diskless CPU's in Schools, so kids could continue research where ever they were without moving physical stuff around as they moved around. They would log in at the next place and their "workspace:" would be preserved as it was when they left the previous one. Eventually the access would be available in homes as well. To put it simply, I don't believe they fully followed through, but last I checked they were all doing IP6 research with CMU using these installed updates to the local (so to speak) back bone in PGH. So they did follow through with what was promised, though I don't know at what bps or Mbps the connections were made, I do know that my replacement/counter part at the old job told me about the major upgrades both in and outside the building to the whole network, shortly after I left. As I didn't care too much, I didn't ask what speeds all the new fiber was running at (previously a mix of mostly 10 and some 100baseT copper).

Pretty sure FIOS is comming to Delaware county, PA

Well, for the record, I'm no Verizon fan, and was more than happy to cancel my POTS line.

The past few weeks, driving through my town (Bethel Twp, Delaware County, PA) I noticed quite a few Verizon trucks and spools of fiber optic cable frequenting the intersections of roads. They've also dug up quite a few recently built developments to bury fiber optic cable in front of residential areas.

I decided to speak to a fellow Twp. Employee, the building inspector, who did nothing but bitch about those Verizon guys, and their stupid project to run fiber optic cables to all the houses in the Township.

I'm no detective (well, at least not yet), but I would say it's a good bet Fios is coming my way....

As I said, I'm no verizon fan, but let's face it, you dangle a little bit of the crack of the broadband world in my face, I'm taking a pull.....

here is a interesting scam verizon pulled

i thought it seemed like someone just whining. then i did a search for "verizon scams" and found tons of complaints and blogs about it. i guess they really are! why though? they have millions of dollars why take the little guy for a ride? what about the verizon future? won't people leave them????